CAPITAL: Paris

MONETARY UNIT: Franc

REFINING CAPACITY: 1,901,123 b/cd

OIL PRODUCTION: 34,272 b/d

OIL RESERVES: 107 million bbl

GAS RESERVES: 509 bcf

Gaz de France was working to expand France`s liquefied natural gas import capacity as part of its push to promote the nation as a key European gas hub.

GdF planned to increase capacity of its Montoir-de-Bretagne LNG terminal in Brittany, near Nantes, to 8 bcm/year from 5.5 bcm/year to handle an extra 4 bcm/year of LNG imports due from Nigeria.

GdF signed contracts in 1992 for 0.5 bcm and Italy`s ENEL signed for 3.5 bcm in 1997. GdF devised a roundabout system to service the ENEL contract, which required the cooperation of Italy`s Snam gas utility.

Instead of moving the gas via pipeline through France to Italy, which would have required capacity increases, 1.5 bcm would be delivered from Algeria`s Arzew LNG terminal to Snam`s La Spezia terminal in small methane carriers, since the port was unable to accommodate large carriers.

The remaining 2 bcm would be exchanged for GdF`s Russian supplies and added to Snam`s own Russian gas supplies. That gas would flow through Austria`s TAG pipeline from Baumgarten, on the border with Hungary and Slovakia.

Separately, GdF had a 25-year contract with Snam for delivery of 6 bcm/year of Norwegian gas beginning in 2001. GdF was building the Les Marches du Nord-Est pipeline to move the gas. In all, GdF was servicing 9.5 bcm of gas for Italy`s ENEL and Snam.

GdF Pres. Pierre Gadonneix said France was a gas hub for Europe. With the arrival of Norwegian gas at Dunkirk, GdF had acquired its 11th delivery point for imported gas in Europe.

During 1997-99, GdF spent 17.4 billion francs to improve transportation and distribution of imported gas in or through France.

Two planned projects were a 120-km line, Artre des Plateaux du Vexin, from Gournay to St. Illiers, near Paris, and a 195-km line, Artre du Centre, linking Danz, near Vendeme, with Roussine near Chateauroux.

Processing activity

France`s refiners scheduled investments totaling 6.7 billion francs during 1998-2001 to meet impending European Union specifications for motor fuels.Beginning Jan. 1, 2000, EU member states were required to meet tighter restrictions on sulfur and aromatics in gasoline and diesel fuel. Stricter requirements were scheduled for 2005.

The French refining association said the seven companies involved in the refining industry made record profits of 6.1 billion francs om 1998, but they did not cover needed investments.

The refiners were Total, Elf Aquitaine, Exxon Corp., Royal Dutch/Shell, BP Amoco PLC, Mobil Corp., and Petrofina SA. Total and Petrofina agreed to merge, as Exxon and Mobil did.

The French refiners said it would cost them 50% more to meet 2005 fuel specifications than their European counterparts, largely because they lacked conversion capacity to deal with unneeded heavy fuel oil and were unable to balance increasing diesel oil needs with declining gasoline demand.

The refiners were concerned by the government`s proposed "ecotax" on pollution. They said it could end their last markets for heavy fuel oil and erode industry`s overall competitiveness.

Elf Antar France was conducting a $30 million revamp of a hydrodesulfurization unit and a sour water stripper unit at its Donges refinery.

The project would enable Elf to comply with cuts in the sulfur content of diesel fuel and gasoline. It was due to increase the hydrodesulfurization plant`s treating capacity by 20%.

The French government supported Total Fina SA`s plan to merge with Elf Aquitaine SA. The government had a "golden share" in Elf, which allowed it to veto any merger.

Tanker accident

A Maltese-registered tanker carrying 8 million gal of diesel sank in the Bay of Biscay off Brest after a December 1999 storm.

Heavy seas and favorable currents dispersed much of the oil, reducing some of the pollution to the French coast 35 miles away.

Two tugs towed the stern of the 20,000-ton Erika further out to sea. All 26 crew members were rescued.

The accident was near the site of the Amoco Cadiz supertanker wreck of March 1978. It spilled 223,000 tonnes of crude and polluted long stretches of the French coast.

The Erika was en route from Dunkirk to Leghorn, Italy, when it foundered and broke in two. Total Fina SA, Europe`s third-largest oil company, owned the cargo.

Crew members claimed the tanker was in bad condition. Brest police detained the captain for possible prosecution.